Gas prices hold steady despite record demand in June

Gas prices are lower now then they were last July when this photo was taken.

A record number of people are predicted to hit the highways and byways for this holiday weekend as the gas use numbers show people have already been doing a lot of traveling early in the summer.

Iowa Department of Agriculture analyst Harold Hommes says the numbers for crude oil refined into gas tell the story. “The last two weeks in a row we have had record-setting summer demand at around 9.8 million barrels a day — which is a late June record,” Hommes says. “Demand is certainly up and that is eating a little bit into the inventories available.”

Refineries have been able to keep up the gasoline supply despite the record demand. “Right now my OPUS report — which is the oil industry price report — that’s indicating pretty ample supplies. And we are running about 92 to 93 percent utilization from refineries. So, they are chucking through a very ample supply of crude oil, and that is giving us good inventories,” Hommes says.

He says steady oil prices and the lack of major issues with the refineries have kept gas prices down. Hommes says the prices have been flat and steady with a low of around $1.50 a gallon in central Iowa, and there was one price hike up, but the prices have hovered around an average of $2 to $2.30. Hommes says the terminal price that retailers pay has stayed in a range where retailers can make some profit and still keep the gas price steady. He doesn’t see that changing in the near term.

“Things seem to be holding pretty flat and I think we are approaching a period where there’s a fairly good balance between supply and demand,” Hommes says. Hommes says the favorable gas supply is illustrated in the fact that demand has been up, but the pump price has held steady with a big holiday on the horizon.

“A lot of times people kind of anticipate that we have maybe a bump prior to these holidays — whether it be Memorial Day or the Fourth of July — but the reality is in the last week we’ve actually seen sort of a retreat of retail gasoline prices. We’ve dropped a good 10 to 12 cents just prior to the Fourth of July weekend here,” according to Hommes.

The average price of regular unleaded gasoline reported in Iowa Tuesday by AAA was $2.29. That’s the same price as one week ago and 43 cents lower than one year ago.